This 3-Step ICT Strategy Works Every Day (Simple and Proven)

Summary

This video presents a simple yet effective three-step ICT strategy for trading, developed over 14 years of experience. The strategy focuses on identifying key price levels, using tools like fair value gaps and previous daily highs and lows, to set up trades. It emphasizes timing entries with market conditions and avoiding poor setups. The final step highlights the importance of emotional control and executing a well-defined trading plan, even during market fluctuations. The strategy is ideal for prop firm trading and encourages disciplined execution to ensure consistent profitability.

Takeaways

• 😀 **Key Levels Matter**: Marking out daily highs, lows, fair value gaps, and order blocks is crucial to identifying entry points in trading. Focus on these key levels to set up trades.
• 😀 **The Power of Fair Value Gaps**: Fair value gaps (FVG) are essential tools in this strategy. They act as markers for where price might move and can be used for both bullish and bearish trades.
• 😀 **Simplifying the Strategy**: While you can use multiple tools like Fibonacci retracements and order blocks, the strategy can be effective with just fair value gaps. Simplicity is key.
• 😀 **Timing is Everything**: It's not enough to know when to trade, but also *when* to trade it. Timing your trades based on news events and session openings is essential for success.
• 😀 **Patience is Key**: Avoid chasing markets or entering trades prematurely. Wait for price to reach the key levels you've identified, and only then execute the trade.
• 😀 **Avoid Poor Setups**: If the market doesn't move as anticipated, or doesn't reach your key levels, don't force a trade. Stick to your plan and wait for the right conditions.
• 😀 **Follow the Plan**: Trading is about executing the plan consistently, even when market fluctuations tempt you to abandon your strategy. Stick to the identified entry points and target levels.
• 😀 **The Emotional Challenge**: Managing your emotions during a trade is a huge factor in success. The market will fluctuate, but your ability to remain disciplined is key to executing the plan.
• 😀 **Execution is Everything**: Even with the best analysis, failing to execute your plan properly can derail your success. Traders often fail because they second-guess themselves when things don’t go perfectly.
• 😀 **Realistic Expectations for Prop Firms**: This strategy works well in prop firm environments, where you're trading other people's capital. Be mindful of trading rules like closing before rollover periods.
• 😀 **Mentorship Matters**: After struggling for years, the trader emphasizes the importance of mentorship. Gaining access to a proven trader’s insights can significantly improve your trading journey.

Q & A

What is the key foundation of this ICT strategy?

The foundation of the ICT strategy involves marking out the previous day's highs and lows, identifying key levels within the 24-hour trading window, and using concepts like fair value gaps, order blocks, and Fibonacci retracements to spot trading opportunities.

Why is it important to mark the previous day's highs and lows?

Marking the previous day's highs and lows helps traders understand the market's reference points for the next trading day. These levels give insight into potential price targets for long or short positions based on whether the market is expected to go higher or lower.

What is a fair value gap, and why is it significant in this strategy?

A fair value gap is a price zone where the market has moved quickly, creating an imbalance in supply and demand. These gaps are significant because they often act as areas of potential support or resistance, and they provide key entry points for trades.

What is the importance of timing in the ICT strategy?

Timing is critical because even if the market shows an ideal setup, entering at the wrong time can lead to losses. Understanding the market calendar, news events, and market session timing helps traders avoid poor setups and align their trades with the most favorable market conditions.

How does the strategy handle news events during trading?

The strategy takes news events into account by adjusting the timing of trades. For example, if there is a high-impact news event during the New York session, the trader may wait until the event passes before entering a position, as news events can cause market manipulation or volatility.

What role does market structure play in the strategy?

Market structure helps determine the overall trend and direction of the market. If the market shows signs of bearish or bullish movement, traders can use this information to plan their entries and set their targets, always looking to align with the prevailing market trend.

How do you avoid chasing trades in this strategy?

To avoid chasing trades, the strategy emphasizes patience. If the market moves too quickly in one direction without providing an ideal entry point (e.g., moving past key levels without a proper setup), traders are advised not to enter the market, as this can lead to FOMO (Fear of Missing Out) and poor execution.

What is the key to executing trades successfully in this strategy?

The key to successful execution lies in discipline and emotional control. Traders must stick to their plan, regardless of market fluctuations, and not be swayed by short-term market movements. This includes waiting for the right setups and managing trades according to the pre-defined strategy.

What is the analogy used in the video to explain trade execution?

The analogy compares a trader's journey to California on a bus. The bus may make pit stops (representing market fluctuations), but the goal is to stay on the bus and follow the plan, rather than abandoning the trade because of short-term setbacks or delays.

How does the strategy work well for prop firms?

The strategy works well for prop firms because it provides clear entry points, a strong understanding of market structure, and a risk management framework that aligns with the objectives of trading for a firm, where consistency and discipline are key.